Multi-Property Rental Dispute
How NetIncasso secured full recovery of €1.4M in unpaid rental payments from a property management company with assets strategically hidden across multiple European jurisdictions.
Case Overview
A major real estate investment trust (REIT) faced significant cash flow challenges when a property management company managing a portfolio of 120+ residential units across three countries failed to transfer €1.4M in collected rental payments, effectively pocketing tenants' money.
After conventional debt collection efforts failed due to the company's strategic asset distribution across multiple jurisdictions, and two other collection agencies declared the debt uncollectable, the REIT approached NetIncasso for specialized legal intervention.
The complexity of the case stemmed from the property manager's deliberate structure: registered in Luxembourg, with banking relationships in Cyprus, operational offices in Germany, and beneficial owners in the UK. This strategic fragmentation was designed specifically to frustrate collection efforts.
Key Challenges
- Multi-jurisdictional asset concealment
- Deliberate corporate structure designed to obstruct recovery
- Lack of documentation linking collected payments to the REIT
- Legal counter-claims alleging property maintenance expenses
- Urgent need for recovery due to REIT investor obligations
Our Approach
Cross-Jurisdictional Investigation
Our specialized real estate team conducted a comprehensive forensic investigation across all relevant jurisdictions, revealing a pattern of rental payment collection followed by strategic fund transfers designed to obscure the money trail. We identified previously unknown banking relationships and corporate affiliates in Switzerland and Malta.
Tenant Payment Documentation
Rather than focusing solely on property management contracts, our team gathered documentation directly from tenants, establishing a clear paper trail of payments made but not forwarded to the REIT. This approach circumvented the management company's primary defense strategy based on contractual ambiguities.
Coordinated Multi-Jurisdiction Legal Action
We implemented a coordinated legal strategy across five jurisdictions, with synchronized legal actions designed to freeze assets and prevent further fund transfers. This included preliminary injunctions in Luxembourg and Germany, disclosure orders in Cyprus, and garnishment actions in Switzerland, all executed within a 72-hour window.
Beneficial Owner Pressure Strategy
Beyond corporate entities, we identified and engaged with the property management company's ultimate beneficial owners in the UK, implementing legal and reputational pressure that highlighted potential personal liability, including the risk of criminal proceedings for fraud and misappropriation of funds.
Counter-Claim Neutralization
The property management company attempted to justify withholding funds by claiming €620,000 in property maintenance expenses. Our forensic accounting team systematically dismantled these claims by demonstrating documentation inconsistencies and obtaining statements from purported service providers who confirmed they had not performed the claimed services.
Results & Outcome
Within 94 days of NetIncasso's engagement, the property management company agreed to a full settlement of €1.4M plus interest and a significant portion of legal costs. The key factors that drove this successful outcome included:
- The coordinated freezing of approximately €900,000 across multiple bank accounts, creating immediate pressure
- The dismantling of maintenance expense counter-claims, eliminating the main defense strategy
- Personal liability concerns for beneficial owners created by our UK legal team
- Reputational risk to the property management company's other business interests
Beyond the immediate financial recovery, our client implemented our recommended contractual framework for all future property management relationships, including enhanced documentation requirements, direct bank account visibility, and clearly defined funds transfer protocols.
This case demonstrates NetIncasso's ability to overcome deliberately complex jurisdictional structures designed to frustrate conventional collection efforts, particularly in real estate scenarios where property management companies exploit legal complexity to withhold funds.
After struggling with this case for nearly two years, NetIncasso delivered results within three months that we believed were impossible. Their understanding of cross-border real estate disputes and ability to coordinate legal action across multiple jurisdictions was remarkable. The recovery of these funds was critical to our investor obligations, and NetIncasso delivered when others couldn't.
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